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If you read My 2021 Money Goals, you’ll know that my main focus this year is getting out of debt.

At the start of January, I had a total of $40,623 of debt between my car loan ($4,383) and my student loans ($36,239).

I want to be debt free by December 31st, 2021. I’m going to make this happen.

In order for me to pay off that amount of debt, I need to put over $3,385 to it every month, or over $781 a week, or over $111 every day.

If you look at my income right now, none of that is really possible. But I can make it possible.

I have created a plan for where my money is going, how I can increase my income, and other possible outcomes:

Debt Avalanche

First of all, I want to mention that I am still planning on paying off my debt using the Debt Avalanche method. This method involves paying off my highest interest debts first and working my way down.

Student loans have been in forbearance with no interest accruing since March. I’m not sure if/when that will change, but that is why I’ve been focusing on paying off my car loan.

Car: $4,383 My car will be paid off by the end of February.

If student loans continue to be at 0% interest, that would be great. However, I will still be going in the order I originally intended:

Student Loan 1-07: $4,778.98 at 4.41%
Student Loan 1-09: $12,219.16 at 4.04%
Student Loan 1-10: $4,804 at 4.04%
Student Loan 1-05: $5,091.71 at 3.61%
Student Loan 1-06: $2,067.75 at 3.61%
Student Loan 1-03: $4,123.60 at 3.15%
Student Loan 1-01: $3,153.64 at 3.15%

My FT Job Income and My Spending

I will be getting a raise in June and my total gross income from my full time job should be around $67,357.

From that income, here is how I expect my spending to look for the whole year:

Taxes: $11,571 My income isn’t taxed, so I pay quarterly estimated taxes and this is what I have calculated after considering the standard deduction.

Sinking Funds: $6,000 I have sinking funds for my emergency fund, travel, personal spending, car maintenance, FinCon, medical/dental, and gifts. As of right now I save $500 monthly and whatever is saved in each would cover those expenses.

Roth IRA: $1,200 I invest $100 monthly for now.

Donate: $650 I donate $50 each month, but I’m OK with this number being higher.

Rent/Utilities: $19,000 My largest expenses, obviously. This number includes my rent, valet trash, renter’s insurance, wi-fi, electricity, and water/sewage.

Groceries: $3,600 This is $300 a month for groceries including toiletries and such.

Food out: $450 I’m not really sure, I’m just assuming about $35 a month and rounded up the total.

Gas (car): $300 I should be driving more than I did in 2020, but I live less than 3 miles from my job. This is assuming $25 each month.

Car: $4,383.99 My car should be paid off by the end of February.

Life Insurance: $1,080 Don’t ask lol. I don’t really like having this, but I’ll lose quite a bit of money if I stop. I was advised incorrectly.

Health: $800 This includes my vitamins and supplements. I’m not sure on this number yet either. I would also include medical co-pays in here, but I would pull from my sinking fund.

Phone/Car insurance/Dogs: $1,300 My sister auto-pays our family phone plan. My dad pays for my car insurance. So I pay for my phone bill plus my dad and step mom’s bill because it costs about the same as my insurance. I also send an additional $50 a month to my sister because she has our 3 dogs. This is pretty low because when we signed up with Verizon we received a rebate to cover our phone bill for 6-7 months.

Spotify: $120 Spotify is $9.99 a month

Personal Spending: $600 In addition to the $600 I’ll have saved in my sinking fund. I’m also not sure on this number because I don’t know what to expect this year. $1,000 total on personal spending for the year seems reasonable to me.

If you subtract all these expenses from my total income, I would be left with $16,302.

And you may have noticed I left out one thing from that list…my student loans.

Student loans: $16,302 All of the left over money goes to my debt. This is a pretty solid amount! Plus, this is what is left after saving and investing, both of which are part of my 2021 goals as well.

Online Income and Expenses

Determining my online income is tricky. I set a goal of earning at least $12,000 this year, but obviously I would need to earn more to pull off paying all of my debt. I’ve also never made that much online before, but that doesn’t need to hold me back!

Let’s assume my gross online income will be $12,000 though.

Business expenses: $2,000 Running an online business is relatively inexpensive. I spent about this much in 2020 but it is just an estimate.

Taxes: $1,880 After I write off my expenses, I would estimate $1,880 in taxes for the year.

This leaves me with $8,120 or so to put toward my debt.

Between these 2 incomes I should be able to pay off at least $24,422 in 2021.

Extra Income

I do expect to make income outside of my job and business as well.

Credit card cash back, apps, and selling things can add up!

Credit card cash back: $600 I use my credit cards strategically and try to get the most cash back as possible. I also may receive referral rewards, but I think this is a good estimate.

Apps: $100 Apps like Fetch, Ibotta, and Rakuten. I’m not sure on this number.

Selling things: $100 I’ve decluttered quite a bit and don’t know how much more I could post for sale, so I’ll keep it at $100.

I may also receive more from gifts and other random things, but I’m expecting at least an extra $800 this year.

Again, all that can go to debt and I can now pay off a total of $25,222.

The Possibilities

You can’t predict or plan for everything, so there are quite a few unknowns about 2021 for me.

Stimulus Check: $1,400 I already receive the $600, but apparently Biden wants to get out another $1,400 soon. I definitely DO NOT rely on this, but rather see it as a bonus.
I would probably only use $400-$600 for debt though.

Tax Refund: $500-$1500 I’m not sure on this one. I’m pretty positive I overpaid on taxes, but I also don’t have the large student loan deduction this year. I’m not sure how much of a difference that will make.

Moving: $2,800 Assuming I were to move in May (when my lease ends) to a home costing $1,100 total, I would save $400 each month. I would have $2,800 extra to put toward my debt.
Honestly, I’m leaning toward not moving. I truly love where I live and I don’t think I want to give up the convenience and amenities just yet.

Student Loan Forgiveness: $10,000 If Biden decides to follow through with $10,000 of student loans forgiven, I will definitely be debt free. Again, I am not expecting this or relying on this. I’m not sure how I feel about it either.

Increasing my online income: $?? The possibilities are endless here. The least I can do is create a plan and take action.

  • Upload more videos to YouTube (increase ad revenue)
  • Promote my content daily (Twitter, Instagram, Pinterest, Facebook)
  • Increase affiliate sales (product specific posts, update YT description box, IG photos/reels, apply to more)
  • Revamp old blog posts on (new pins, improve SEO, add links)
  • Find more financial coaching clients (add testimonials, promote, business cards)
  • Land sponsors (create better quality content, reach out to companies, create a media kit)

Overall, I do think it is possible for me to pay down all of my debt and reach $6,000 in my emergency fund (another goal) this year.

I love that the possibilities are endless AND that money is so fun!!